“What we should probably do is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that’s not going to risk the taxpayer dollars, that’s not too big to fail,” Weill told CNBC’s “Squawk Box.”

Barofsky said the financial incentives were too great for bankers not to make risky investments with depositors’ money.

“Ultimately, we get the banks down to a manageable size, and if they make bad risks and blow up, the taxpayer doesn’t have to bail them out,” he said. “We can do this through common sense, not through complex games that are set up that the banks can weave their way through the loopholes and accumulate risk. All this is about is monetizing the implicit guarantee, the subsidy the taxpayers provide through too-big-to-fail.

“We need to break them up. Otherwise, we are going to see a repeat of the same crisis. I’m excited to see gathering momentum against something I’ve been advocating for a long time,” he said.

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Bank Vault Door

Barofsky recently authored a book, titled, “Bailout: An Inside Account of How Washington Abandoned Main Street While Rescuing Wall Street.”

A breakup of banks would prohibit “bank affiliates from underwriting, from being market makers and from engaging in certain hedging activities,” he said. “Now, all three of these activities have been termed by Chairman Volker himself to be beneficial to our economy and society.”

Cohen said the argument was way off track, saying that the Glass-Steagall Act was “enacted on the basis of a false premise, which is that bank securities activities caused the banking collapse in the ’30s.

“Every historian who looked a at that shredded the argument,” he said. “It never happened. The last thing we want to do is repeat the mistake again today.”

Cohen also disagreed that the big banks were to blame for the financial crisis.

“I do not agree with the argument,” he said. “Certainly a number of banks were engaged in overly risky activities. These weren’t just the large banks. Hundreds of smaller banks failed because they engaged in overly risky activities. So for me, the answer is robust regulation, strong capital, strong liquidity, strong risk management, not absolute prohibition.”